New York -- In his official debut as CEO of AOL Time Warner Inc., Dick
Parsons tried to calm investors who were angry that their holdings in the media
giant have lost more than 40 percent of their value since the beginning of the
year by reminding them that their company is No. 1 or No. 2 in virtually every
Parsons -- who appeared to have expected an onslaught of investor anger at
AOL Time Warner's annual shareholders' meeting here Thursday -- said the
company's stock price was a 'source of deep disappointment' to him and the rest
of AOL Time Warner management, but he added that speculation that the company
would be broken apart is not true.
Parsons said AOL Time Warner has the No. 1 movie studio, online service,
magazine and book publisher, premium-cable network, cable-network company and
high-speed-data service in the country. In addition, it owns the No. 2 cable
operator and music company.
Parsons blamed the collapse of the stock on the recession, which affected
most companies but hit AOL Time Warner hardest.
'At the time of the merger, the outlook was rosy and the assessment of risk
was low,' Parsons said. 'In the past 18 months, almost everything has changed.
The dot-com bubble burst and questions arose about the future of AOL Broadband.
That led to a dramatic revaluation of AOL and contributed to the bulk of the
AOL Time Warner chairman Steve Case also apologized for the stock
'It didn't go the way we expected it,' he said.
Parsons reiterated his five-point plan to get AOL Time Warner back on track:
reinvigorate AOL; restore credibility with investors; guard the integrity of the
balance sheet; simplify the corporate structure; and re-energize its
While he added that restructuring its Time Warner Entertainment partnership
with AT&T Corp., as well as its TWE-Advance/Newhouse partnership with the
Newhouse family, is a big part of that simplification process, Parsons offered
no further details other than saying that the company was continuing
negotiations with both parties.
Parsons also ducked a question as to whether AOL Time Warner would be
interested in any of the systems Adelphia Communications Corp. has put on the
'It's not clear as to what exactly is going on [with Adelphia],' he said.
'Clearly, Adelphia has attracted interest. Whether and how that plays out, I
For the most part, shareholders tempered their remarks in the
question-and-answer portion of the meeting, with only a handful expressing their
displeasure with management.
That lack of vitriol was not lost on Parsons, who told a group of reporters
and investors after the meeting that he was surprised more shareholders weren't
'The tone of the meeting was more gracious and respectful than I had
anticipated,' he added.
The annual meeting was also the farewell of cable legend Gerald Levin, who
announced his retirement in December. Levin said his 30-year tenure at Time
Inc., Time Warner Inc. and AOL Time Warner was a 'stunning ride.'
Levin didn't elaborate on his future plans other than having lunch with his
wife, Barbara, and son, Michael, Thursday.